Multilateral lenders top Malawi’s creditors with the World Bank alone accounting for $1.01 billion (about K761 billion), or 42 percent of the country’s total external debt, latest figures show.
A latest annual public debt report compiled by the Debt and Aid Management Division in the Ministry of Finance also shows that at about $1.9 billion (K1.4 trillion) or 83 percent of total external debt, multilateral lenders continue to account for the largest proportion of the country’s external debt estimated at $2.4 billion (about K18 trillion).
This is compared to bilateral creditors who account for 17 percent of all external debt or $407 million (K305 billion) at the end of June 2020.
The report shows that the country’s top five external creditors are International Development Association (IDA) of the World Bank at 42 percent, the African Development Fund at 15 percent or $364 million (K273 billion), the International Monetary Fund (IMF) at 14 percent or $323 million (K242 billion), Export-Import Bank of China at eight percent or $197 million (K147 billion), and Export Import Bank of India at six percent or $139 million (K104 billion).
Based on the figures, it means that combined, the two Bretton Woods institutions—IMF and the World Bank—account for $1.3 billion (about K1 trillion) or about half of Malawi’s total foreign debt.
In an interview on Monday, Ministry of Finance spokesperson Williams Banda, while describing the World Bank loans as highly concessional, said the country has benefited from such resources over the years in sectors such as education, water and sanitation and infrastructure.
“We have put such money to good use by investing in durable or long-term assets and such resources are highly concessional in nature,” he said.
Other multilateral and bilateral donors include International Fund for Agricultural Development at $85 million (K63 billion), Opec Fund for International Development at $70 million (three percent), Arab Bank for Economic Development in Africa at $60 million (K45 billion), Kuwait Fund for Arab Economic Development at $43 million (K32 billion), European Investment Bank at $43 million (two percent), Saudi Fund for Development at $22 million (K17 billion), Nordic Development Fund at $20 million (K15 billion), Abu Dhabi Fund for Development at $4 million (K3 billion) and Government of Belgium at $1 million (K750 million).
Economics Association of Malawi president Lauryn Nyasulu said: “The objective of multilateral institutions is largely to alleviate poverty and therefore, Malawi as a poor country has high chances of accessing more financing compared to bilateral donors.”
On his part, Centre for Research and Consultancy executive director Milward Tobias observed the challenge for the country is the poor use of borrowed resources.